Transcript Atlas Copco Group

Atlas Copco Group
Q3 Results
October 22, 2009
1
October 22, 2009, www.atlascopco.com
Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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October 22, 2009, www.atlascopco.com
Q3 - Highlights
 Stable demand
– Still very low investment level
– Improved demand in some emerging market
– Increased activity within mining but still low equipment order level
 Sales of aftermarket products and services remained at good level
 Healthy profitability
– Annual cost savings in excess of MSEK 2 000 now achieved
– Favorable sales mix supported margin
 Operating cash flow very strong
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October 22, 2009, www.atlascopco.com
Q3 - Figures in summary
 Organic order intake down 30%
 Revenues of MSEK 15 088; 25% organic decline
 Operating profit at MSEK 2 402 (3 640)
– An operating margin of 15.9% (19.7)
– MSEK 60 in positive currency effect compared to last year
 Profit before tax at MSEK 2 210 (3 224)
 Earnings per share SEK 1.42 (1.99)
 Operating cash flow MSEK 4 275 (1 054)
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October 22, 2009, www.atlascopco.com
Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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October 22, 2009, www.atlascopco.com
Orders received - Local currency
Group total -35% YTD (-34 excl. cancellations), -30% last 3 months
(Structural change 0% YTD, 0% last 3 months)
36
16
-44
9
September 2009
6
October 22, 2009, www.atlascopco.com
B
-34
-36
21
13
A
-36
C
-24
-28
-24
-16
-23
-10
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
5
-28
-38
Q3 - The Americas
 Continued weak demand in North
America
– Low order intake for equipment in
construction, mining and most industrial
segments
16
-44
-36
– Some good orders for oil and gas and
energy recovery
 Situation improved in South America
– Recovery noted in both mining and
construction segment
September 2009
A
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October 22, 2009, www.atlascopco.com
B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
9
-24
-10
Q3 - Europe and Africa/Middle East
 Demand remained low in Europe
– Better development in Western than in
Eastern Europe
36
-36
-34
– Russia remained very weak
 Mixed development in Africa / Middle
East
– Good demand within oil and gas sector in
Northern Africa and Middle East but poor
development in the south
September 2009
A
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October 22, 2009, www.atlascopco.com
B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
13
-28
-23
Q3 - Asia and Australia
 Positive development in Asia
– Sequential improvement in China and
India in most customer segments
– Good mining demand in South East
Asia
21
-24
-16
– Weak demand in Japan
 Weak quarter in Australia
5
September 2009
A
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October 22, 2009, www.atlascopco.com
B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
-28
-38
Organic* Growth per Quarter
Atlas Copco Group, continuing operations
 Change in orders received in % vs. same quarter previous year
00 Q1
00 Q2
00 Q3
00 Q4
01 Q1
01 Q2
01 Q3
01 Q4
02 Q1
02 Q2
02 Q3
02 Q4
03 Q1
03 Q2
03 Q3
03 Q4
04 Q1
04 Q2
04 Q3
04 Q4
05 Q1
05 Q2
05 Q3
05 Q4
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
*Volume and price
Order cancellations
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October 22, 2009, www.atlascopco.com
Atlas Copco Group – Sales Bridge
MSEK
2008
Structural change, %
Currency, %
Price, %
Cancellations, %
Volume, %
Total, %
2009
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October 22, 2009, www.atlascopco.com
July - September
Orders
Revenues
Received
18 842
18 440
0
+1
+6
+6
+1
+1
-31
-26
-24
-18
14 309
15 088
January - September
Orders
Revenues
Received
58 135
54 446
0
+1
+9
+10
+1
+1
-1
-35
-24
-26
-12
43 175
47 820
Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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October 22, 2009, www.atlascopco.com
Atlas Copco Group
Operating Profit and Return On Capital Employed (ROCE)
by Business Area
MSEK
12 month values, period ending
Compressor Technique
Construction and Mining Technique
Industrial Technique
Eliminations/Common Group Functions
Atlas Copco Group
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October 22, 2009, www.atlascopco.com
Revenues Operating Operating ROCE
profit
margin
Sep. 2009 Sep. 2009 Sep. 2009 Sep. 2009
34 246
6 174
18.0%
45%
27 521
3 846
14.0%
18%
5 938
407
6.9%
13%
-154
-499
67 551
9 928
14.7%
21%
Compressor Technique

Overall demand stable on low level
– 27% organic order decline
– Good orders from oil and gas segment
– Aftermarket continued to hold up well

Operating margin at 18.6%
– Improvement from previous quarters thanks
to lower costs and favorable sales mix

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Acquisition of Czech service company
October 22, 2009, www.atlascopco.com
Compressor Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
02 Q1
02 Q2
02 Q3
02 Q4
03 Q1
03 Q2
03 Q3
03 Q4
04 Q1
04 Q2
04 Q3
04 Q4
05 Q1
05 Q2
05 Q3
05 Q4
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
20
*Volume and price
Quarterly operating margins include Prime Energy from Q1 2006.
15
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October 22, 2009, www.atlascopco.com
Construction and Mining Technique
 Solid aftermarket but low equipment demand
– Organic order decline of 34%
– Improved activity level within mining
 Operating profit at MSEK 823, a margin of 13.8%
– Under-absorption and currency had a negative
impact
– Favorable sales mix and good cost development
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October 22, 2009, www.atlascopco.com
Construction and Mining Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
30
25
20
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
-35
-35
02 Q1
02 Q2
02 Q3
02 Q4
03 Q1
03 Q2
03 Q3
03 Q4
04 Q1
04 Q2
04 Q3
04 Q4
05 Q1
05 Q2
05 Q3
05 Q4
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
25
*Volume and price
17
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October 22, 2009, www.atlascopco.com
Industrial Technique
 Continued tough market conditions
– Weak demand, both from the motor vehicle industry and the
general industry, organic order intake down 38%
– Positive service development in emerging markets
 Operating profit margin at 6.7%
– Still heavily affected by under-absorption
– Gradual improvement from efficiency
initiatives
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October 22, 2009, www.atlascopco.com
Industrial Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
-15
-15
-20
-20
-25
-25
-30
-30
-35
-35
-40
-40
-45
-45
October 22, 2009, www.atlascopco.com
09 Q3
-10
09 Q1
-10
08 Q3
-5
08 Q1
-5
07 Q3
0
07 Q1
0
06 Q3
5
06 Q1
5
05 Q3
10
05 Q1
10
04 Q3
15
04 Q1
15
03 Q3
20
03 Q1
20
*Volume and price
19
25
Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
20
October 22, 2009, www.atlascopco.com
Group Total
MSEK
Orders received
14 309
18 842
-24
43 175
58 135
-26
Revenues
15 088
18 440
-18
47 820
54 446
-12
Operating profit
2 402
3 640
-34
6 640
10 518
-37
- as a percentage of revenues
15.9
19.7
13.9
19.3
Profit before tax
2 210
3 224
5 947
9 604
- as a percentage of revenues
14.6
17.5
12.4
17.6
Profit from continuing operations
1 730
2 432
4 576
7 087
-
-
-
184
Profit for the period
1 730
2 432
4 576
7 271
Basic earnings per share, SEK
1.42
1.99
3.75
5.94
- of which continuing operations, SEK
1.42
1.99
3.75
5.79
Profit from discontinued operations, net of tax
Return on capital employed, %
1)
21
January - September
%
2008
2009
July - September
2008
2009
Excluding non-recurring w rite dow n of RSC notes.
October 22, 2009, www.atlascopco.com
21
34
1)
%
-31
-29
-38
-35
Profit Bridge
July – September, 2009 vs 2008
MSEK
Q3 2009
Organic Grow th
Price/Volum e
Currency
One-tim e item s
Acq./Div.
Q3 2008
Atlas Copco Group
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Revenues
15 088
-4 542
1 140
50
18 440
EBIT
2 402
-1 308
60
10
3 640
%
15.9%
29%
-
-
19.7%
October 22, 2009, www.atlascopco.com
Profit Bridge – by Business Area
July– September, 2009 vs 2008
Q3 2009
MSEK
Organic Grow th
Currency
Price/Volum e
One-tim e item s
Q3 2008
Acq./Div.
Com pressor Technique
Revenues
7 799
-1 864
610
25
9 028
EBIT
1 451
-525
50
5
1 921
%
18.6%
28%
-
-
21.3%
5 976
-2 206
420
20
7 742
823
-517
-120
5
1 455
13.8%
23%
-
-
18.8%
1 243
-655
105
5
1 788
83
-255
0
1
337
6.7%
39%
-
-
18.8%
Construction & Mining Technique
Revenues
EBIT
%
Industrial Technique
Revenues
EBIT
%
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October 22, 2009, www.atlascopco.com
Balance Sheet
24
MSEK
Sept 30, 2009
Dec 31, 2008
Sept 30, 2008
Intangible assets
Rental equipment
Other property, plant and equipment
Other fixed assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL ASSETS
12 593
2 048
6 046
6 060
12 623
15 883
1 598
10 005
35
66 891
19%
3%
9%
9%
19%
24%
2%
15%
0%
12 916
2 282
6 353
7 977
17 106
21 603
1 659
5 455
43
75 394
17%
3%
8%
11%
23%
29%
2%
7%
0%
12 177
1 992
5 698
4 797
16 371
19 770
1 531
3 403
39
65 778
19%
3%
9%
7%
25%
30%
2%
5%
0%
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
23 404
27 498
15 989
66 891
35%
41%
24%
23 768
30 404
21 222
75 394
32%
40%
28%
18 759
27 694
19 325
65 778
29%
42%
29%
October 22, 2009, www.atlascopco.com
Capital Structure
Net Debt*/EBITDA
2,5
2,0
1,9
1,5
1,6
1,0
0,5
0,9
0,6
0,8
1,4
1,4
1,2
1,4
1,4
1,5
1,3
1,2
0,8
0,0
-0,5
-1,1 -1,1
-1,0
-1,5
2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009
Q1 Q2 Q3
Q1 Q2 Q3
Q1 Q2 Q3
Q1 Q2 Q3
*Net Debt adjusted for the fair value of interest rate swaps
25
October 22, 2009, www.atlascopco.com
Atlas Copco AB’s Loan Maturity Profile
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2009
2010
2011
2012
2013
Public Bonds
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October 22, 2009, www.atlascopco.com
2014
2015
Bank Loans
2016
2017
2018
2019
Cash Flow
27
MSEK
July - September
2009
2008
Operating cash surplus after tax
of which depreciation added back
Change in working capital
Cash flows from operating activities
Investments in tangible fixed assets
Sale of tangible fixed assets
Other investments, net
Cash flow from investments
Operating cash flow
Company acquisitions/ divestments
2 360
661
2 032
4 392
-387
164
106
-117
4 275
-10
October 22, 2009, www.atlascopco.com
2 936
524
-772
2 164
-708
126
-528
-1 110
1 054
-45
January - September
2009
2008
5 383
1 840
5 118
10 501
-1 332
471
-22
-883
9 618
-165
8 557
1 483
-3 103
5 454
-2 008
370
-1 466
-3 104
2 350
-223
Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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October 22, 2009, www.atlascopco.com
Near-term Outlook
The overall demand is expected to stay around the current level.
The demand in some emerging markets, including China and India,
is expected to gradually improve.
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October 22, 2009, www.atlascopco.com
30
Cautionary Statement
“Some statements herein are forward-looking and the actual
outcome could be materially different. In addition to the factors
explicitly commented upon, the actual outcome could be materially
and adversely affected by other factors such as the effect of
economic conditions, exchange-rate and interest-rate movements,
political risks, the impact of competing products and their pricing,
product development, commercialization and technological
difficulties, supply disturbances, and major customer credit losses.”
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October 22, 2009, www.atlascopco.com